Recent Amendments to the Companies Act
19 August 2020
By Mary J. Mahabir, Q.C. and Joanna M. Austin
The Companies Act Cap 308 of the laws of Barbados (the “Act”) was amended on January 1, 2019, (the “January Amendment”) to require companies earning 100% of their earnings in foreign currency to file certain information with the Director of International Business. It was further amended on May 20, 2019 (the “May Amendment”) and on December 3, 2019 (the “December Amendment”). This article highlights some of the other main amendments namely, Annual Return (“Return”) filings, beneficial ownership records, disclosure of politically exposed persons such as government ministers (“PEPs”) and corporate service provider (“CSP”)1 service requirements.
(a) Annual Returns
Section 15A of the Act which provides for the filing of the Return was amended by the May Amendment and again by the December Amendment and now exempts companies whose gross revenue in its most recent financial statements exceeds BD$1,000,000 from filing a Return2. Effectively smaller companies not otherwise exempt and CSPs will comprise the majority of Return filings as CSPs are excluded from the exemption. Returns must be filed by 30th June or 31st December subject to the date of incorporation. Entities within the international business (“IB”) sector and holders of foreign currency permits (FCP) are exempt.
(b) Prominent Public Office
The May Amendment introduces a definition of “prominent public office” at Section 2 which includes offices generally considered to be PEPS and others such as chief executive officers of international organisations. When filing articles of incorporation, incorporators must disclose the names of any director who holds or has held a prominent public office in Barbados or elsewhere3.
(c) Beneficial shareholding
The May Amendment includes definitions of (i) “beneficial owner” (ii) “beneficial ownership” and “beneficial interest”.
The December Amendment to Section 170 of the Act requires that companies retain up to date records of shareholder and beneficial ownership at their registered office. These records must also disclose whether any shareholder has held a prominent pubic office. Ultimate beneficial ownership information must also be provided to the International Business Unit for IB entities and FCP holders. The retention of beneficial ownership information at registered offices (versus the public record) appears consistent with Canadian law requirements and seems a step closer to the global trend for divulgence of beneficial ownership. There is presently no indication that the UK requirement to publicly divulge beneficial ownership information is forthcoming.
(d) CSP services
The December Amendment provides that effective 180 days post its commencement on December 3, 2019, a company described in section 15A(7)(h) (i.e. whose gross revenue exceeds BD$1,000,000), that is not (i) a licensed financial institution; (ii) Financial Services Commission registered or licensed entity; (iii) an CSP or (iv) an external company not holding a licence under (i) or (ii), shall have a CSP perform its corporate services.4
(e) Annual Meetings
Companies are now required to have annual meetings every 12 months instead of 15 months pursuant to the December Amendment of section 105.
Some of the major amendments are illustrative of increased disclosure and anti-money laundering compliance requirements and ever changing OECD and EU requirements.
Matters, including notarisation of documents, the submission of tax and NIS clearance certificates for dissolution, are also formally addressed.
A detailed review of the Amendments is recommended.
This article, current at the date above and as first published in the Barbados International Finance and Business Magazine 2020, is for general purposes only. It does not constitute legal advice and should not be relied upon as such. You should not act upon any information contained herein without first seeking qualified legal advice on your specific matter.
1 Licensees under the Corporate Trust and Service Providers Act, 2016
2 Section 15A 7(h)
3 Section 66
4 As defined in the Corporate and Trust Service Providers At, 2015-12
Original Article in Barbados International: Finance & Business Magazine